The previous wave of investment in the space industry, while including funding for what Rocket Lab CEO Peter Beck called “silly” ideas, proved “fantastic” for the overall sector, he argued. In a keynote address at the Smallsat Symposium on February 4th, Beck defended the surge in deals, including numerous special purpose acquisition company (SPAC) mergers, many of which ultimately faltered. “The SPAC frenzy was a crazy, crazy time,” he stated. “Truthfully, a lot of companies went public that just should not have.”
However, Beck highlighted the benefits for companies like Rocket Lab, which went public via a SPAC merger in 2021 and successfully navigated what he termed “the great filter.” “That whole thing was crazy but actually fantastic for the space industry because it injected large amounts of capital into the industry.” This positive assessment extended to the broader wave of venture capital investments in space startups. “A lot of private companies got funding for projects that I looked a bit cross-eyed at,” he recalled, “and large quantities of capital.”
He acknowledged the potential for wasted resources: “At the end of the day, you can look at it two ways. One is, what a waste of capital,” he said. “But, I generally believe that, even into silly ideas, great people were developed, some new technologies were developed. It wasn’t a total loss in most cases.” The result, he concluded, is a higher quality of companies overall. “What you’ve ended up with is a much higher quality of company across the board, both public and private,” Beck said, noting that renewed investment is more discerning.
Looking ahead, Beck predicted significant consolidation within the space industry in 2024, impacting companies of all sizes. Larger, established players will consolidate to maintain competitiveness in a more commercial, less government-subsidized environment. Smaller companies, he suggested, might merge to handle increased demand. “If you’re a small company and someone turns up and gives you a giant order of some kind, it’s really hard to build the infrastructure to scale and scale quickly,” he explained. Mid-sized companies may also consolidate to reach a larger scale.
While Beck didn’t specify Rocket Lab’s plans, he highlighted the benefits of the company's public listing. Rocket Lab’s share price, trading below $10 in October, closed at $28.68 on February 4th. “The great thing about public markets is that they’re very efficient,” Beck said. “If you do a good job, you get rewarded. If you don’t, you get penalized. You can’t make excuses in a boardroom. The public markets are pretty ruthless.”